New Delhi: After a long wait, the Union Cabinet has formally approved the formation of the 8th Pay Commission. The Central Government announced the Commission’s formation in January 2025, and now its Terms of Reference (scope and guidelines) have also been approved. The Commission will submit its report to the Central Government within 18 months. Its implementation is expected to directly benefit approximately 50 lakh central employees and 68 lakh pensioners.
Recommendations To Be Implemented
The government has clarified that the recommendations of the 8th Central Pay Commission will be effective from January 1, 2026. This Commission will be an ad-hoc body consisting of a Chairman, a Member, and a Member-Secretary.
8th Pay Commission Delayed? 10 Months After Approval, Panel Yet to Be Formed
The Commission will be required to submit its report within 18 months from the date of its formation. It is expected to comprehensively review the pay structure, allowances, pension benefits, and other service conditions of employees.
Commission Will Make Recommendations On These Issues
According to the government, the Commission will have to make recommendations on the following key issues:
- How to balance pay revisions while taking into account the country’s economic situation and fiscal discipline.
- Ensuring adequate resources for developmental expenditure and welfare schemes.
- Evaluating the unfunded cost of non-contributory pension schemes.
- The impact of the Commission’s recommendations on the financial structure of state governments, as state governments typically adopt the central government’s recommendations with some modifications.
- Comparing the salaries, allowances, and working conditions of employees in Central Public Sector Undertakings (CPSUs) and the private sector and making appropriate recommendations.
Pay Commission Constituted Every 10 Years
In India, the Pay Commission is constituted approximately every 10 years. Its purpose is to review the salaries, allowances, retirement benefits, and other benefits of central government employees.
Seven Pay Commissions have been constituted so far. The recommendations of the 7th Pay Commission were implemented from January 1, 2016. In the same sequence, the 8th Pay Commission will be implemented from 2026.
8th Pay Commission: Preparations for big changes for central employees!
Employees Hope: Salary And Pension Improvements
Central employees are elated by this announcement. Employee organizations have urged the government to not only increase salaries but also reconsider dearness allowance (DA), pension revisions, and the minimum wage.
Experts believe that if the new recommendations are implemented in a timely manner, they will not only increase employees’ incomes but could also positively boost the country’s consumption and economic activity.